How Will Lawmakers Agree To Raise Revenue And Avoid The Fiscal Cliff?

May 22, 2018

On Tuesday the Legislature starts its second special session this year. Lawmakers will attempt to address the state's nearly $650-million budget shortfall. The question is: How will they agree to raise revenue?

Gov. John Bel Edwards says he's keeping an open mind.

"In order to get to $648 million, there's a lot of ways, and I'm very flexible about that and I’ve made that statement clear," he said.

But Edwards says the options on the table this time around aren't much different than they were a few months ago, when Republicans and Democrats in the House couldn't agree on how to fix the shortfall.

Rep. Lance Harris (R-Alexandria), chairman of the House Republicans, says he's not willing to consider making changes to individual income tax deductions in order to raise money, since federal tax changes mean that many in Louisiana will already be paying more in state taxes. Instead, he and other Republicans would prefer to keep a portion of the one-penny sales tax in place that's expiring June 30.

"Is it going to be permanent, is it going to be temporary? Those are the questions we'll be answering," said Harris.

On Friday, Edwards said he's willing to extend up to half of that penny as part of a compromise, which would raise more than $400 million.

House Democratic leader, Rep. Robert Johnson (D-Marksville), says his party is open to that as well, but like the Governor, they favor making tax changes permanent, in order to bring some stability to the state's budget.

"I don't think Democrats want to see anything temporary because we're going to be back in the same situation we're in right now," said Johnson.

Legislators will also have to agree on exactly how much money to raise. Edwards and Democrats support replacing all of the $650 million shortfall. Some Republicans, on the other hand, have suggested they don't need to raise quite that much for next year's budget.

They have until June 4 to reach an agreement.